What Percent Should You Set the Indices Stop Loss Order at?

Strategies of Setting Stop Loss Indices Orders in Indices Trading

Traders using a indices trading strategy must have mathematical calculations that calculate where the Stop Loss Indices Order should be placed.

A Indices trader can also place a stop loss indices order according to the technical indicators used to set these stop loss stock indices orders.

Certain technical indicators use mathematical equations to calculate where the stop loss stock indices orders should be set so as to provide an optimal exit point.

These stock indices indicators can be used as the basis for setting these stop loss stock indices orders.

Traders also place these stop loss stock indices orders according to a predetermined risk to reward ratio. This method of setting stop loss indices orders is dependent upon certain mathematical equations. For example a ratio of 20 pips stop loss can be used by a Indices trader if the trade has the potential to make 40 pips in profit; this is a risk reward ratio of 2:1

Other traders just use a predetermined percentage of their total indices trading account balance.

To set a stop loss indices order it is best to use one of the following percentage based methods:

Setting Stop Loss Indices Order based on Percentage of Trading Account Balance

This stop loss setting method is based on the percent of indices trading account balance that the indices trader is willing to risk.

If a indices trader is willing to risk 2% of account balance then the indices trader determines how far he will set the order level based on the open trade position size that he has bought or sold.

Example:

If a indices trader has a $10,000 account and is willing to risk 2%

• If a indices trader buys 0.1 contract or 0.1 Standard Lots

  1 pip = $1

  Then setting at 2% - 2% Stop Loss Indices Order Setting Percent

  2% is $ 200

  200 /1 = 200 pips

  Stop loss = 200 pips

• If a indices trader buys 0.5 contracts or 0.5 Standard Lots

  1 pip = $5

  Then setting at 2% - 2% Stop Loss Indices Order Setting Percent

  2% is $ 200

  200 /5 = 40 pips

  Stop loss = 40 pips

• If a indices trader buys 1 contract or 1 Standard Lot

  1 pip = $10

  Then setting stop loss at 2% - 2% Stop Loss Indices Order Setting Percent

  2% is $ 200

  200 /10 = 20 pips

  Stop loss = 20 pips

How to Set Stop Loss Indices Orders based on the Indices Trading Account Balance Percent Method - What is a good Stop Loss Indices Order Setting Percentage